The London market saw £52 billion wiped off top flight shares today, as oil prices tumbled sending the market close to four-year lows.

The FTSE 100 Index fell more than 3%, or 203.2 points, to 5673.6 as the price of Brent Crude dipped below 27.50 US dollars a barrel. It was the market’s lowest level since November 2012.

Oil prices have collapsed by more than 70% since their peak of around 115 US dollars a barrel in summer 2014, as large producers such as Saudi Arabia maintain production levels, putting US shale rivals under pressure.

Global markets also slumped with New York’s Dow Jones Industrial Average falling more than 2% in early trading, while Germany’s Dax and the Cac 40 in France were around 3% lower.

The London market has seen over £160 billion wiped off the value of top flight shares in the first three weeks of the year due to slowing growth in China and falling oil prices.

Michael Hewson, chief market analyst at broker CMC Markets, said: “Few stocks were spared today as European equity markets plunged sharply today with the FTSE100 hitting levels last seen in November 2012, and tipping into bear market territory.”

Bank of England governor Mark Carney said on Tuesday that policymakers were in no rush to raise interest rates amid a weakened world economy and slowing UK growth.

The International Monetary Fund (IMF) said on Tuesday that easing growth in China and rising geopolitical tensions led it to cut global growth forecasts for the next two years.

In its latest World Economic Outlook, the IMF predicted world growth of 3.4% this year followed by 3.6% in 2017.

This is a cut in growth of 0.2% in each year from when the fund published its last forecasts in October.

Oil giant Shell fell almost 7% after it said it expects full-year underlying earnings to tumble to between 10.4 billion dollars (£7.3 billion) and 10.7 billion dollars (£7.6 billion), due to falling oil prices.

The group is weeks away from completing a 55 billion US dollar (£38 billion) deal to buy gas giant BG Group.